06 November 2006

The Underground Economy

For more than a century, many poor and working class residents of America's inner cities--in particular those black Americans who were confined to urban ghettos by segregation and economic disenfranchisement--have been forced to hustle to make ends meet. And they've also developed their own mechanisms for resolving conflicts when a hustle goes bad.

These residents live in what the University of Chicago sociologists St. Clair Drake and Horace Cayton called the "shady world." Coined in the mid-20th century, their phrase describes the vibrant social life that arose around making money off the books. Then and now, not only residents, but churches, block clubs, stores, and other organizations have played a part in a shadow economy that most Americans neither see nor encounter.

Today, social scientists see the shady world as largely criminal. But this is only partially correct. Examine the underground economy and you will see signs of strength as well as indices of social problems. An incident like the one I observed between the mechanic and his customer hardly seems a positive exchange. How the neighborhood came to resolve the dispute, however, might change your perspective on how inner cities work.